Credit Analysis and Decision Making Course

Lesson 1 • Regulatory and Ethical Framework

Covers capital adequacy standards, lending regulations, and ethical obligations. Grounds analysts in compliance requirements that shape every credit decision.

Lesson 2 • Participants in Credit Markets

Identifies key market participants and their incentives. Connects institutional roles to the credit decision process.

Lesson 3 • The Credit Analyst's Role

Outlines analyst responsibilities, deliverables, and career pathways. Frames the professional context for skills developed throughout the course.

Lesson 1 • Adjustments and Normalisation

Teaches analysts to restate financials for one-time items, accounting choices, and owner adjustments. Produces comparable, reliable figures for credit modelling.

Lesson 2 • Understanding the Income Statement

Explains revenue recognition, expense classification, and profitability metrics. Connects income trends to a borrower's capacity to service debt.

Lesson 3 • Financial Statement Limitations

Highlights risks of earnings management, aggressive accounting, and incomplete disclosures. Trains analysts to apply professional scepticism when reviewing reported figures.

Lesson 4 • Analysing the Balance Sheet

Covers asset, liability, and equity structure and their credit implications. Reveals gearing, liquidity, and net worth positions critical to risk assessment.

Lesson 1 • Liquidity Ratios and Their Meaning

Covers current, quick, and cash ratios as measures of short-term solvency. Links liquidity levels to a borrower's ability to meet near-term obligations.

Lesson 2 • Debt Service Coverage Ratios

Defines DSCR, interest coverage, and fixed-charge coverage as repayment capacity measures. These ratios are the most direct indicators of a borrower's ability to service debt.

Lesson 3 • Profitability and Efficiency Ratios

Analyses return on assets, return on equity, and asset turnover metrics. Connects operational efficiency to long-term creditworthiness and repayment sustainability.

Lesson 4 • Ratio Trend and Peer Analysis

Applies ratios over time and against industry peers to identify deterioration or strength. Contextualises individual metrics within competitive and cyclical environments.

Lesson 1 • Management and Governance Quality

Assesses leadership track record, strategic clarity, and governance structures. Management quality is a leading indicator of financial discipline and crisis response.

Lesson 2 • Competitive Position and Market Share

Evaluates a borrower's standing within its industry relative to peers. Stronger competitive positions correlate with more stable cash flows and lower credit risk.

Lesson 3 • Integrating Qualitative and Quantitative Risk

Combines financial metrics with qualitative factors into a unified risk narrative. Produces a holistic borrower assessment that supports defensible credit recommendations.

Lesson 4 • Industry Analysis Frameworks

Applies competitive analysis tools to assess industry attractiveness and risk. Provides the macro context needed to interpret a borrower's financial performance accurately.

Lesson 1 • Judgement-Based Rating Approaches

Covers analyst-driven rating frameworks that blend quantitative and qualitative inputs. Develops the structured judgement skills needed when models are insufficient.

Lesson 2 • Scorecard and Statistical Models

Introduces quantitative scoring models including logistic regression and Z-score approaches. Demonstrates how models translate financial inputs into probability-of-default estimates.

Lesson 3 • Probability of Default and Loss Metrics

Defines PD, LGD, and EAD as the core components of expected credit loss. Links these metrics to loan pricing, provisioning, and portfolio management decisions.

Lesson 4 • Credit Rating Fundamentals

Explains rating scales, grade definitions, and the purpose of internal risk ratings. Establishes the language and logic used throughout the credit approval process.

Lesson 1 • Collateral and Security Structures

Examines collateral types, valuation methods, and lien priority. Security structures determine recovery outcomes when a borrower defaults.

Lesson 2 • Structuring for Specific Credit Types

Applies structuring principles to real estate, project finance, and leveraged lending. Demonstrates how deal type drives unique structural and covenant requirements.

Lesson 3 • Affirmative and Negative Covenants

Defines behavioural covenants that restrict or require specific borrower actions. These provisions protect lender interests beyond financial performance thresholds.

Lesson 4 • Financial Covenant Design

Teaches how to set maintenance and incurrence covenants tied to key financial metrics. Well-designed covenants provide early warning signals and trigger renegotiation before default.

Lesson 1 • The Credit Approval Process

Maps the end-to-end workflow from origination through approval and booking. Understanding process stages prevents errors and delays in credit execution.

Lesson 2 • Decision Frameworks and Heuristics

Introduces structured decision tools including the five Cs of credit and risk-return frameworks. Provides mental models that improve consistency and speed in credit judgements.

Lesson 3 • Stress Testing and Scenario Analysis

Applies downside scenarios to test whether a borrower can service debt under adverse conditions. Stress testing is a required component of sound credit underwriting.

Lesson 4 • Defending Recommendations Under Challenge

Prepares analysts to present and defend credit views in committee settings. Develops the communication skills needed to handle pushback and revise positions appropriately.

Lesson 1 • Loan Workout and Restructuring

Examines strategies for restructuring distressed credits to maximise recovery. Workout decisions balance lender recovery objectives against borrower viability.

Lesson 2 • Post-Origination Monitoring Framework

Establishes systematic processes for tracking borrower performance against covenants and projections. Continuous monitoring is the primary defence against unexpected credit losses.

Lesson 3 • Provisioning and Credit Loss Accounting

Explains expected credit loss provisioning models and their impact on financial statements. Accurate provisioning ensures lenders hold adequate reserves against portfolio losses.

Lesson 4 • Watchlist and Classified Credit Management

Covers watchlist criteria, classification grades, and required management actions. Classified credits demand heightened oversight and documented remediation plans.